Expanding Horizons

On a rainy and, for Texas, cool September Saturday, Cigars International opened its first store outside of its home state of Pennsylvania. The lousy weather had little impact on the more than 1,000 people who came to experience the grand opening. People with umbrellas began lining up at 6:30 a.m. to be first in line when the doors opened at

9 a.m. Goodie bags were ready for the first 500 people through the door, and those were gone within an hour after the doors opened.

Cigars International’s director of retail operations, Matthew Cook, said he had to stop the line coming in about five times so the store would not reach its maximum occupancy limit. All in all, it was quite a debut.

Cigars International’s president, Craig Reynolds, says building the new store is part of his company’s overall expansion strategy. “We feel very strongly that the industry is as healthy as the brick-and-mortar segment is healthy,” he says. “By building retail stores, we’re simply adding another destination where cigar lovers and new smokers can come together to enjoy cigars. Our stores are meant to complement the traditional cigar shop experience, which will help to drive more consumer interactions and ultimately help to grow the category.”

The store was built from the ground up in six months, and it is in a huge mixed-use real estate development called Grandscape, which is located in The Colony, a northern suburb of Dallas. The development is owned by Warren Buffet’s Nebraska Furniture Mart, which serves as its anchor tenant on more than 400 acres. Plans call for nearly
4 million square feet of retail, entertainment, dining, residential, office space and attractions. The Grandscape developers pride themselves on bringing diversified offerings but especially like to have the first-in-market retailers. Cigars International certainly fits.

Cook says The Colony and Grandscape have been wonderful partners, saying it was a pleasure working with them on permits and construction. Cook even made a welcome and unexpected change at their request: to feature the company’s brand logo, which is a smiley face smoking a cigar. “We had planned to put the ‘smoking smiley’ logo inside the store and have [the words] ‘Cigars International’ on the side of the building facing the highway, but then everybody from The Colony asked if we would mind putting the smiley up there on the building. The people who own Grandscape also asked if we could put the smiley up. So we did, with ‘Cigars International’ above it and ‘The Colony’ written below.” The result is a very distinctive look to the building.

Cook says the store’s architectural look and feel is also unique, “What we were going for is a Northeast tobacco barn. On the real barns, there are wooden slats that can be opened to bring air in. The shades on the side of the building are meant to represent that.

“The long, rectangular-style building is reminiscent of a tobacco barn. The truss work in The Colony store is a design element we carried over from two of our other stores. It’s become symbolic of our stores and mimics the inside of a tobacco barn.”

At over 7,000 square feet with the outside patio space included, the store is very airy.That could also be due to the 32-foot-high ceilings. Unlike Cigars International’s other stores, this one is not humidified throughout. Instead, it features an enclosed 2,500-square-foot humidor. “With our Dallas area location, we wanted to keep the feel of openness, and that’s why we put in the floor-to-ceiling glass walls so you can still see inside the humidor,” says Cook. “We also designed the store to maximize interaction with our consumers by making stock areas easily accessible for our sales associates. From the bar layout, there is easy access to the backroom for kegs and other restocking, and the same thing on the cigar side, with easy access to the humidified backroom for any product that is not out on the floor.”

The store’s ventilation is one of Cook’s proudest achievements. On opening day, at any one time there were about 300 people inside the store smoking cigars, yet there was no trace of smoke. Quite an accomplishment. “If you want a great environment, you have to consider what consumers are looking for, and handling the smoke is one of the most important considerations,” Cook says. “We cater not only to our male clientele but also to the female [clientele]—there are lots of female cigar smokers out there and just as many women interested in entering the category. We try to accommodate everybody.”

While the newest Cigars International location itself does not offer food, it is available. When building the store, Cook and his team approached restaurants in the area with the idea of having condensed versions of their menus that could be delivered to customers at Cigars International. The company has successfully done this at its location in Hamburg, Pennsylvania. Happily, the restaurants agreed, and even on the store’s opening weekend people were able to order food and have it delivered.

Asked why they chose The Colony as the location for the first store outside of Pennsylvania, Cook says, “Weanalyzed our data and found a lot of reasons—the strong customer base in the Dallas-Fort Worth [DFW] market, the pro-business attitude in Texas and a lot of growth in DFW. Data showed this is where we should go, and The Colony certainly checked all the boxes for us.”

Cook said he was extremely fortunate in being able to bring five employees from Hamburg to manage the store. When talking about opening a store in Texas, Cigars International’s staff members were asked if anyone wanted to make the move, and there were volunteers, which was critical. “I believe anybody can sell cigars and alcohol,” says Cook. “The difference, to me, is selling the experience, whether it is through the physical space of the store, the cigar selection or the knowledge of the employees, it all goes hand-in-hand, and that is what makes the difference in the retail division of Cigars International. We believe if we focus on those things, the customers will come.”

Lance Ragland, who lives nearby, agrees: “This is a place where you can drink and smoke cigars at the same time. Whether sports are on or not, I think this is gonna be the place to be.” For Gabriel Montalvo, who lives in South Fort Worth, it was an hour’s drive, but he felt it was worth it. “We went to Cigars International up in Pennsylvania,” he says. “We stumbled upon the Hamburg store in a snowstorm. When I heard they were opening here, we had to go. I was buying from Cigars International online for about 10 years. In Texas, everything is far away, so an hour drive is not that bad. It is amazing.”

One thing to consider is whether the store will hurt the company’s online sales from the North Texas market. Reynolds says no. “It is counterintuitive to put your brick-and-mortar stores where you already have strong online sales. We’ve shown with the store we opened in Hamburg and through other studies, brick-and-mortar supports online sales and vice versa. Ultimately, this benefits the category.”

Cook adds, “What you are seeing is an increase in awareness. A lot of my sales are in individual cigars. Consumers use the store as a chance to experience new cigars. If they find something they like, they go online and buy a box. You’d think internet sales would go down, but in reality, it doesn’t work that way.”

As for future plans, Cigars International has already announced it is looking for property in Fort Worth. “We’re testing the superstore concept with two or three locations, and if it’s successful, we will be expanding further,” says Reynolds. “We don’t have a number, and we don’t have the cities mapped out. We just know Texas is a wonderful cigar-consuming state.” He also emphasizes that, before construction, General Cigar Company went out to talk with local storeowners, realizing the sensitivity to suppliers opening stores. Reynolds believes growing the overall cigar market is a big part of what Cigars International is doing. “The handmade cigar category was built on the kinds of personal interactions that can only be had in-store,” he says. “I truly believe that a rising tide floats all boats, and we are committed to supporting the brick-and-mortar segment to help drive continued category growth.”